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Posted by Admin Posted on Oct 02 2013

Summary of Debt Ceiling Increase

Posted by Suzi Posted on Oct 02 2013
Summary Of Debt Ceiling Increase

Congress approved a bill on August 2 increasing the debt ceiling by $2.1 trillion, averting default and limiting the downgrade of the federal government's AAA bond rating.

The legislative package not only raised the debt limit enough to keep the government operational through 2012, it also established an ambitious and complicated deficit reduction plan that includes spending cuts, a special "super committee" that will recommend further cuts in spending, enforcement triggers, and a vote on a balanced budget amendment to the U.S. Constitution.

Below is a summary of most of the agreement's major components (as of August 4, 2011):

Debt Ceiling Increase

The current $14.3 trillion ceiling on federal borrowing would be increased by an amount between $2.1 trillion and $2.4 trillion - a sum presumed sufficient to allow the Treasury Department to operate beyond the 2012 election and into 2013.

The increase would come in two steps. The debt limit would be increased by $900 billion immediately. Of that first $900 billion, $500 billion would be subject to a congressional resolution of disapproval. To block the increase, such a resolution would presumably have to be enacted over the president's veto, a step that requires two-thirds majority votes in both chambers.

A second increase of $1.2 trillion to $1.5 trillion would be available later. The size of the second increase would be determined by actions Congress takes to curtail growth in the debt.

If by early 2012 a joint congressional committee created by the legislation has recommended, and Congress has enacted, $1.5 trillion in additional savings for fiscal 2012-2021, the second increase in the debt limit would be $1.5 trillion. Alternatively, the debt limit would be increased by $1.5 trillion if a constitutional amendment requiring a balanced budget is sent to the states for ratification.

If the joint committee recommends, and Congress enacts, savings of less than $1.5 trillion, or if no additional savings are enacted, the second debt limit increase would be $1.2 trillion. The second debt limit increase would also be subject to a congressional resolution of disapproval, which could be vetoed.

Spending Cuts - First Round

An immediate reduction in the deficit would be achieved by placing statutory caps on discretionary appropriations for fiscal years 2012 through 2021. The savings would amount to $935 billion over 10 years, according to the Congressional Budget Office, when compared with spending levels estimated in January, or $756 billion when compared with CBO's March estimate that took into account savings enacted as part of fiscal 2011 appropriations (PL 112-10).

The discretionary spending cap for fiscal 2012 would be $1.043 trillion, which is about $24 billion more than the amount set by the House-adopted budget resolution (H Con Res 34). The cap for fiscal 2013 would be $1.047 trillion. For both years, a "firewall" would be erected between security (national defense, homeland security, and related activities) and non-security accounts - meaning domestic programs could not be targeted to provide more security spending.

The caps for fiscal 2014 through fiscal 2021 would not segregate security and non-security spending.

Enforcement Mechanism for Spending Caps

If lawmakers did not adhere to the discretionary appropriations caps, a process for imposing across-the-board, automatic spending cuts from discretionary accounts would take effect after Congress adjourns for the year.

The automatic mechanism would be similar to the system of spending "sequesters" enacted as part of the 1985 Gramm-Rudman anti-deficit law (PL 99-177). Some spending, including military pay, would be exempt from the automatic cuts.

Spending Cuts - Second Round

The new joint committee could recommend specific ways to reduce the deficit by an additional $1.5 trillion by 2021. The panel would be required to consider recommendations from regular legislative committees, and to report its recommendations to both chambers, subject to up-or-down votes without amendment.

The committee would be required to report by Nov. 23, and the House and Senate would be required to act by Dec. 23.

All of the federal budget would presumably be on the table, including entitlement cuts and revenue increases.

Enforcement Triggers for Panel Recommendations

Should the enacted recommendations from the joint committee not produce at least $1.2 trillion in savings, a process for automatic spending cuts would be triggered to achieve the desired savings and spread spending cuts equally across nine fiscal years.

Any sequester would be equal to the portion of the $1.2 trillion savings target that was not achieved. The first automatic cuts would take effect Jan. 2, 2013, and would fall equally on defense and non-defense accounts, including both discretionary spending and some entitlement spending.

Programs targeting low-income individuals and families would largely be exempt from the sequester, as they were under Gramm-Rudman. Medicare cuts would be restricted to no more than 2 percent of the program's outlays, and would only affect payments to providers, not beneficiaries.

Entitlement Cuts

The special joint committee would be likely to look closely at entitlement spending to achieve its deficit reduction goals. The spending cuts would be subject to tough negotiations over the next four or five months.

If a sequester was triggered, some restricted automatic cuts in Medicare spending might occur. It is unclear what other entitlement spending might be subject to a sequester.

Taxes

The proposal does not include immediate increases in revenue, although the joint deficit-reduction committee might consider revenue increases.

Earlier in the negotiations, Boehner proposed an increase of $800 billion in revenue. Such an increase might come either from elimination of tax breaks for individuals or corporations, or a comprehensive overhaul of the tax code might be structured to yield a net revenue increase.

Balanced-Budget Amendment

The plan requires both the House and the Senate to vote on a proposed balanced-budget amendment to the Constitution by the end of the year. If two-thirds of both chambers voted to adopt this amendment - and send it to the states for ratification - the second debt limit increase would be $1.5 trillion.

Treasury, IRS Seek Public Input on Certain Employer Provisions of the Affordable Care Act

Posted by Suzi Posted on Oct 02 2013

Treasury, IRS Seek Public Input on Certain Employer Provisions of the Affordable Care Act

WASHINGTON-The Treasury Department and Internal Revenue Service today requested public comment on a proposed affordability safe harbor for employers under the shared responsibility provisions included in the Affordable Care Act that will apply to certain employers starting in 2014.

Under the Affordable Care Act, employers with 50 or more full-time employees that do not offer affordable health coverage to their full-time employees may be required to make a shared responsibility payment. Notice 2011-73, posted today on IRS.gov, solicits public input and comment on a proposed safe harbor, designed to make it easier for employers to determine whether the health coverage they offer is affordable. To that end, Treasury and IRS expect to propose a safe harbor permitting employers that offer coverage to their employees to measure the affordability of that coverage by using wages that the employer paid to an employee, instead of the employee?s household income. This contemplated safe harbor would only apply for purposes of the employer shared responsibility provision, and would not affect employees? eligibility for health insurance premium tax credits.

Today?s request for comment is designed to ensure that Treasury and IRS continue to receive broad input from stakeholders on how best to implement the shared responsibility provisions in a way that is administrable, allows flexibility, and minimizes burden.  By soliciting comments and feedback now, Treasury and IRS are giving all interested parties the opportunity for input before proposed regulations are issued.

There are three ways to submit comments.

  • E-mail to: Notice.Comments@irscounsel.treas.gov. Include ?Notice 2011-73? in the subject line.
  • Mail to: Internal Revenue Service, CC:PA:LPD:PR (Notice 2011-73), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
  • Hand deliver to: CC:PA:LPD:PR (Notice 2011-73), Courier?s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, between 8 a.m. and 4 p.m., Monday through Friday.

The deadline for comments is December 13, 2011.

Vendor and Employee review for upcoming year end reporting

Posted by Suzi Posted on Oct 02 2013

In preparation for the upcoming year-end, we would like to remind you to make sure all your vendor information is correct for any 1099?s that you may have.  Please be sure to have the following information updated: payee legal name, identification number [Federal Identification Number (EIN) or Social Security Number (TIN)], and their complete mailing address.  You are required to file a 1099-MISC if, in a calendar year, you made payments of $600.00 or more to an individual, partnership, LLC or attorney(s) (regardless of entity classification), for services, rents or subcontracting services. 

 

Also, if we prepare your payroll, please verify that we have their correct name, social security number and mailing address, so we have accurate information when preparing their W-2?s for 2012. Keep in mind that bonus pay is considered compensation and must be included in payroll calculations, for W-2 reporting purposes.

Wisconsin Notifies Roll Your Own Cigarette Retailers of Compliance Requirements

Posted by Suzi Posted on Oct 02 2013

Wisconsin Notifies Roll Your Own Cigarette Retailers of Compliance Requirements

by Robert J. Ziegler, Esq. (RIA)

The Wisconsin Department of Revenue has issued a notice to retailers operating a roll your own (RYO) machine reminding them to comply with their legal obligations. Revenue agents will also be going on-site to the RYO retailers to ensure compliance with the cigarette tax law and regulations. ( Revenue Issues Notice to Roll Your Own (RYO) Retailers to Follow the Law, Wis. Dept. Rev., 09/23/2011 .)

Compliance requirements. The Department estimates there are approximately 50 to 100 RYO machines in Wisconsin. Under Wisconsin law, if a retailer or the retailer's customer operates a RYO machine on the retailer's premises to make cigarettes with loose tobacco, the retailer is both a cigarette manufacturer and distributor. As a consequence, the retailer is required to:

(1) Obtain both manufacturer and distributor permits from the Department of Revenue. A retailer needs the cigarette manufacturer permit because its business involves producing cigarettes with loose tobacco. A distributor permit is required so that the appropriate Wisconsin cigarette tax stamps are affixed to all cigarette packages customers take with them when they leave the retail premises.
(2) Sell more than 50% of the RYO cigarettes wholesale to other retailers or vending machine operators, if retailers wish to continue selling RYO cigarettes directly to customers. Retailers cannot own, control, or operate these other entities.
(3) Obtain certification from the Wisconsin Department of Justice to be placed on its approved directory of cigarettes for sale in Wisconsin to be in compliance with state law and regulations.
(4) Obtain certification from the Wisconsin Department of Safety and Professional Services that these cigarettes meet the fire safety performance standards.

The Department encourages RYO retailers to voluntarily comply with the law. Retailers who fail to comply with state law and regulations can be subjected to fines, penalties, permit revocation, imprisonment, and/or seizure of the tobacco and other personal property used in RYO activity.


Posted by Admin Posted on Oct 02 2013

Welcome to Our Blog!

Posted by Admin Posted on Oct 02 2013
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